JA N UA RY 2013

o r g a n i z a t i o n

p r a c t i c e

Making

time management
the organizations priority
Frankki Bevins and Aaron De Smet

To stop wasting a finite resource, companies should tackle time problems systematically rather than leave them to individuals.

For more on this topic, see A personal approach to organizational time management, on mckinseyquarterly.com.

The problem Time scarcity is getting worse: always-on communications, organizational complexity, and unrelenting economic pressures are compounding an ageold challenge. Why it matters With almost 50 percent of executives saying that theyre not spending enough time on strategic priorities, time challenges are a concern for companies, not just individuals.

What to do about it Treat time management as an institutional issue rather than primarily an individual one. Establish a time budget and limit new initiatives when the human capital runs out. Beware of becoming so lean that you overwhelm managers; dont stint on high-quality assistants to help manage executive time. Measure the time executives spend on strategic priorities and set explicit time-based metrics. Use a master calendar to root out time-wasting meetings.

When a critical strategic initiative at a major multinational stalled recently, company leaders targeted a talented, up-andcoming executive to take over the project. There was just one problem: she was already working 18-hour days, five days a week. When the leaders put this to the CEO, he matter-of-factly remarked that by his count she still had 30 more hours Monday to Friday, plus 48 more on the weekend.

Extreme as this case may seem, the perennial time-scarcity problem that underlies it has become more acute in recent years. The impact of always-on communications, the growing complexity of global organizations,1 and the pressures imposed by profound economic uncertainty have all added to a feeling among executives that there are simply not enough hours in the day to get things done. Our research and experience suggest that leaders who are serious about addressing this challenge must stop thinking about time management as primarily an individual problem and start addressing it institutionally. Time management isnt just a personalproductivity issue over which companies have no control; it has increasingly become an organizational issue whose root causes are deeply embedded in corporate structures and cultures. Fortunately, this also means that the problem can be tackled systematically. Senior teams can create time budgets and formal processes for allocating their time. Leaders can pay more attention to time when they address organizational-design matters such as spans of control, roles, and decision rights. Companies can ensure that individual leaders have the tools and incentives to manage their time effectively. And they can provide institutional support, including best-in-class administrative assistance a frequent casualty of recent cost-cutting efforts. Approaches like these arent just valuable in their own right. They also represent powerful levers for executives faced with talent shortages, particularly if companies find their most skilled people so overloaded that they lack the capacity to lead crucial new programs. In this article, well explore institutional solutionsafter first
1For more on global organizational challenges, see Martin Dewhurst, Jonathan Harris,

and Suzanne Heywood, The global companys challenge, mckinseyquarterly.com, June 2012; and Toby Gibbs, Suzanne Heywood, and Leigh Weiss, Organizing for an emerging world, mckinseyquarterly.com, June 2012.

reviewing in more detail the nature of todays time-management challenge, including the results of a recent survey.

Time: The infinite resource

When we asked nearly 1,500 executives across the globe2 to tell us how they spent their time, we found that only 9 percent of the respondents deemed themselves very satisfied with their current allocation. Less than half were somewhat satisfied, and about one-third were actively dissatisfied. Whats more, only 52 percent said that the way they spent their time largely matched their organizations strategic priorities. Nearly half admitted that they were not concentrating sufficiently on guiding the strategic direction of the business. These last two data points suggest that time challenges are influencing the well-being of companies, not just individuals. The survey results, while disquieting, are arguably a natural consequence of the fact that few organizations treat executive time as the finite and measurable resource it is. Consider the contrast with capital. Say that a company has $2 billion of good capitalinvestment opportunities, all with positive net present value and reasonably quick payback, but just $1 billion of capital readily available for investment. The only options are either to prioritize the most important possibilities and figure out which should be deferred or to find ways of raising more capital. Leadership time, by contrast, too often gets treated as though it were limitless, with all good opportunities receiving high priority regardless of the leadership capacity to drive them forward. No wonder that so few leaders feel they are using their time well or that a segmentation analysis of the survey data (Exhibit 1) revealed the existence not only of dissatisfied executives but of four distinct groups of dissatisfied executivesonline junkies, schmoozers, cheerleaders, and firefighterswhose pain points, as well see, reflect the ways organizations ignore time. (For a full description of each group, see sidebar Four flavors of frustration, at the end of this article.)
2 The online survey was in the field from November 8 to November 18, 2011, and garnered

responses from 1,374 executives at the level of general manager or above. Respondents represent all regions, industries, company sizes, forms of ownership, and functional specialties. To adjust for differences in response rates, the data are weighted by the contribution of each respondents nation to global GDP.

Q1 2013 Time allocation Exhibit 1 Exhibit 1.1 of 2

Executives who are dissatisfied with their use of time fall Executives who are groups. into four distinct dissatised with their use of time
Gap in time spent by dissatisfied vs satisfied executives,1 % Gap in time spent by dissatised vs satised executives,1 %

fall into four distinct groups.

Online junkies

(n = 108)

Ofce centered; spend more time than most e-mailing or on phone and less time than others motivating people or being with direct reports Less time Time spent on task by highly satised More time

E-mail, voice mail (asynchronous) With clients, customers

36

33

Q1 2013 Time allocation Exhibit 1.1 of 2

50
Face-to-face communication

21 reports

With direct

Executives who are dissatised with their use of time fall into four distinct groups.
Gap in time spent by dissatised vs satised executives,1 %
1 Gap calculated as % of time spent by satised executives in a given activity, situation, or communication mode. For

Cheerleaders (n for111) executives, n = 124. Exhibit 2 graphs how satised executives allocated = dissatised executives, n = 433, satised
regions, industries, company sizes, forms of ownership, and functional specialties

their time. Spend more time than others interacting face to face or in meetings with employees and only limited Source: Nov 2011 McKinsey survey much less likely at the level of general manager or above, time with external stakeholders; of 1,374 executivesthan others to use e-mail or phone representing all

Less time

Time spent on task by highly satised

More time

Face-to-face communication Managing people Managing external

45

17

27 stakeholders
With clients,

39 customers

1Gap calculated as % of time spent by satisfied executives in a given activity, situation, or communication mode. For dissatisfied executives, n = 433, for satisfied executives, n = 124.
1 Gap calculated as % of time spent by satised executives in a given activity, situation, or communication mode. For

dissatised executives, n = 433, for satised executives, n = 124. Exhibit 2 graphs how satised executives allocated their time.

Q1 2013 Time allocation Exhibit 1.1 of 2 Executives who are dissatised with their use of time fall into four distinct groups.
Gap in time spent by dissatised vs satised executives,1 %

Schmoozers

(n = 107)

Spend almost all their time with external stakeholders but lack thinking time and neglect strategy; a few privileged employees get face-to-face accessbut no open-door policy for the rest Less time Time spent on task by highly satised More time

With clients, 17 customers Setting direction, strategy

25

Q1 2013 Time allocation 36 Exhibit 1.1 of 2

46 Alone

E-mail, voice mail (asynchronous)

Executives who are dissatised with their use of time fall into four distinct groups.
Gap in time spent by dissatised vs satised executives,1 %
1 Gap calculated as % of time spent by satised executives in a given activity, situation, or communication mode. For

Fireghters = 433, for satised executives, n = 124. Exhibit 2 graphs how satised executives allocated (n = 107) dissatised executives, n
their time. regions, industries, company sizes, forms of ownership, and functional specialties

Spend much of their time responding to emergencies via e-mail and phone; are on their own more Source: Nov 2011 McKinsey survey to think or to set direction than othersbut rarely use timeof 1,374 executives at the level of general manager or above, representing all Less time Time spent on task by highly satised More time

Managing short-term/ unexpected issues E-mail, voice mail (asynchronous) Face-to-face

67

50

24 communication
Setting direction, strategy

25

Source: Nov 2011 McKinsey survey of 1,374 executives at the level of general manager or above, representing all regions, industries, company sizes, forms of ownership, and functional specialties
1 Gap calculated as % of time spent by satised executives in a given activity, situation, or communication mode. For

dissatised executives, n = 433, for satised executives, n = 124. Exhibit 2 graphs how satised executives allocated their time.

Initiative overload
The myth of infinite time is most painfully experienced through the proliferation of big strategic initiatives and special projects common to so many modern organizations. The result is initiative overload: projects get heaped on top of day jobs, with a variety of unintended consequences, including failed initiatives, missed opportunities, and leaders who dont have time to engage the people whose cooperation and commitment they need. Organizations often get change fatigue and eventually lack energy for even the most basic and rewarding initiatives. Many dissatisfied executives, particularly firefighters and online junkies, struggle to devote time and energy to the personal conversations and team interactions that drive successful initiatives. The online junkies spend the least time motivating employees or being with their direct reports, either one on one or in a group; face-to-face encounters take up less than 20 percent of their working day. The communication channels they most favor are e-mail, other forms of asynchronous messaging, and the telephoneall useful tools, but often inadequate substitutes for real conversations.

Muddling through
Another unintended consequence of our cavalier attitude toward this supposedly infinite resource is a lack of organizational timemanagement guidance for individual managers. Imagine someone on day one of a new job: shes been through the training and onboarding, arrives at the office, sits down at her desk, and then . . . ? What determines the things she does, her schedule, the decisions she gets involved with, where she goes, whom she talks with, the information she reviews (and for how long), and the meetings she attends? Nine out of ten times, we find, the top two drivers are e-mails that appear in the inbox and meeting invites, albeit sometimes in reverse order. Diary analyses of how different people spend their time in the same rolesales rep, trader, store manager, regional vice president often provoke astonishment at the sharply contrasting ways different individuals perform the same job. The not-so-good performers are often highly fragmented, spending time on the wrong things in the wrong places while ignoring tasks core to their strategic objectives.

Our survey suggests that a laissez-faire approach to time management is a challenge for all four types of dissatisfied executives, but particularly for the schmoozers (CEOs are well represented) and cheerleaders (often C-suite executives one level down). These individuals seem to be doing valuable things: schmoozers spend most of their time meeting face to face with important (often external) stakeholders, while cheerleaders spend over 20 percent of theirs (more than any other dissatisfied group) interacting with, encouraging, and motivating employees. But consider the things these people are not doing. Cheerleaders spend less time than other executives with a companys external stakeholders. For schmoozers, more than 80 percent of interaction time takes place face to face or on the phone. They say they have difficulty connecting with a broad cross-section of the workforce or spending enough time thinking and strategizing. The same challenge confronts cheerleaders, who spend less than 10 percent of their time focused on long-term strategy. The bottom line: muddling through and devoting time to activities that seem important doesnt always cut it, even for a companys most senior leaders.

Troublesome trade-offs
When new initiatives proliferate without explicit attention to the allocation of time and roles, organizations inadvertently make trade-offs that render their leaders less effective (see sidebar Drowning in managerial minutiae). Companies often exacerbate time problems through the blunt application of delayering principles. One organization we know applied the rule of seven (no more than seven direct reports for managers) to all parts of the organization. It forgot that different types of managerial work require varying amounts of time to oversee, manage, and apprentice people. In some cases (such as jobs involving highly complicated international tax work in finance organizations), a leader has the bandwidth for only two or three direct reports. In others (such as very simple call-center operations, where employees are well trained and largely selfmanaging), it is fine to have 20 or more. While the average span of control might still work out at seven, applying simple rules in an overly simplistic way can be costly: managers with too few direct reports often micromanage them or initiate unnecessary meetings, reports, or projects that make the organiza-

tion more complex. Conversely, when managers dont have enough time to supervise their people, they tend to manage by exception (acting only where theres a significant deviation from whats planned) and often end up constantly firefighting. We saw these dynamics most at work among our surveys firefighters. General managers accounted for the largest number of people in this category, which is characterized by the amount of time those in it spend alone in their offices, micromanaging and responding to supposed emergencies via e-mail and telephone (40 percent, as opposed to 13 percent for the schmoozers). Such executives also complained about focusing largely on short-term issues and nearterm operational decisions and having little time to set strategy and organizational direction.

Drowning in managerial minutiae

When we arrived early one morning for a leadership meeting with the director of operations at a large manufacturing company, we found her staring in frustration at her laptop. What are you working on? we asked. I wouldnt say Im working on anything, she said grumpily. Im approving things. Like this $26 requisition for a set of business cards. Ive got all these approvals that I need to approve backed up in the system. I swear I must spend 15 or 20 hours per month on this kind of nonsense. Approving this, managing that, signing off on time sheets, on sick leave, and on budget items in excruciating detail. Every time there is one of these efforts to cut costs in a function, work that had previously been done by a small group of clerks and administrators gets pushed out to executives and managers to do themselves, reducing the clerical department by five or six FTEs.1 If we could measure the time costs for senior managers, wed see that they are much bigger than the cost savingsbut its easier to just shove the work onto someone else and declare victory than to do the really hard work of finding out how to get more efficient.
1 Full-time equivalents.

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Respecting time
The deep organizational roots of these time challenges help explain their persistence despite several decades of research, training, and popular self-help books, all building on Peter Druckers famous dictum: Time is the scarcest resource, and unless it is managed nothing else can be managed.3 So where should leaders hoping to make real progress for their organizationsand themselvesstart the journey? We dont believe theres one particular breakdown of time that works for all executives. But the responses of the relatively small group of satisfied executives in our survey (fewer than one in ten) provide some useful clues to what works. Overall, the key seems to be balance (Exhibit 2). On average, executives in the satisfied group spend 34 percent of their time interacting with external stakeholders (including boards, customers, and investors), 39 percent in internal meetings (evenly split between one on ones with direct reports, leadership-team gatherings, and other meetings with employees), and 24 percent working alone.4 Of the time executives in the satisfied group spend interacting with others (externally and internally), 40 percent involves face-toface meetings, 25 percent video- or teleconferences, and around 10 percent some other form of real-time communication. Less than a third involves e-mail or other asynchronous communications, such as voice mail. The satisfied executives identified four key activities that take up (in roughly equal proportions) two-thirds of their time: making key business or operational decisions, managing and motivating people, setting direction and strategy, and managing external stakeholders. None of these, interestingly, is the sort of transactional and administrative activity their dissatisfied counterparts cited as a major time sink. In our experience, all of those dissatisfied leaders stand to benefit from the remedies described below. That said, just as the principles of a good diet plan are suitable for all unhealthy eaters but the
3See Peter Drucker, The Effective Executive, first edition, New York, NY: Harper & Row, 1967. 4 About 3 percent said other.

Q1 2013 Time allocation Exhibit 2 of 2 11

Exhibit 2 How satised executives spend their time.

Time allocation by highly satised group1 (n = 124 executives), % By activity By situation By communication channel

19

Managing operational decisions

24 Alone 38 Face to face

18

Managing, motivating people

17

With clients, customers, prospects

16

Setting organizations direction, strategy

15

With direct reports, one on one

Managing short-term/ 16 unexpected issues

28 Asynchronous (eg, e-mail, voice mail)

12 With other employees

15

Managing external stakeholders Reviewing organizations performance against goals Other

12 With direct reports in group 10 With external stakeholders 7 3 With board or its members Other

21 Phone

12 5

8 4

Real-time messages Real-time video 1 Other

1 Survey data are weighted by contribution of each respondents nation to global GDP to adjust for differences in

response rates. Source: Nov 2011 McKinsey survey of 1,374 executives at the level of general manager or above, representing all regions, industries, company sizes, forms of ownership, and functional specialties

application of those principles may vary, depending on individual vices (desserts for some, between-meal snacks for others), so too these remedies will play out differently, depending on which time problems are most prevalent in a given organization.

1. Have a time leadership budgetand a proper process for allocating it

Rather than add haphazardly to projects and initiatives, companies should routinely analyze how much leadership attention, guidance, and intervention each of them will need. What is the oversight required? What level of focus should the top team or the steering

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committee provide? In other words, how much leadership capacity does the company really have to finance its great ideas? Establishing a time budget for priority initiatives might sound radical, but its the best way to move toward the goal of treating leadership capacity as companies treat financial capital and to stop financing new initiatives when the human capital runs out. One large health system we know has established a formal governance committee, with a remit to oversee the time budget, for enterprisewide initiatives. The committee approves and monitors all of them, including demands on the systems leadership capacity. Initial proposals must include time commitments required from the leadership and an explicit demonstration that each leader has the required capacity. If not, the system takes deliberate steps to lighten that leaders other responsibilities.

2. Think about time when you introduce organizational change

Companies typically look at managerial spans of control from a structural point of view: the broader they are, the fewer managers and the lower the overhead they need. Augmenting that structural frame of reference with the time required to achieve goals is critical to the long-term success of any organizational change. The hours needed to manage, lead, or supervise an employee represent a real constraint that, if unmanaged, can make structures unstable or ineffective. Getting this right is a delicate balancing act. Excessively lean organizations leave managers overwhelmed with more direct reports than they can manage productively. Yet delayering can be a time saver because it strips out redundant managerial roles that add complexity and unnecessary tasks. One major health-products company we know recently made dramatic progress toward eliminating unnecessary work and taming a notorious meeting culture just by restructuring its finance organization, which had twice as many managers as its peers did. Likewise, when another companythis one in the technology sector reset its internal governance structures, it saved more than 4,000 person-hours of executive time annually while enhancing its strategic focus, increasing its accountability, and speeding up decision making. In particular, the company revamped complex

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decision-making structures involving multiple boards and committees that typically included the same people and had similar agendas and unnecessarily detailed discussions.

3. Ensure that individuals routinely measure and manage their time

At one leading professional-services firm, a recent analysis revealed that the senior partners were spending a disproportionate amount of time on current engagements, to the exclusion of equally important strategic priorities, such as external networking, internal coaching, and building expertise. Today individual partners have a data-backed baseline as a starting point to measure how well their time allocation meets their individual strategic objectives. Executives are usually surprised to see the output from timeanalysis exercises, for it generally reveals how little of their activity is aligned with the companys stated priorities. If intimacy with customers is a goal, for example, how much time are the organizations leaders devoting to activities that encourage it? Most cant answer this question: they can tell you the portion of the budget thats dedicated to the organizations priorities but usually not how much time the leadership devotes to them. Once leaders start tracking the hours, even informally, they often find that they devote a shockingly low percentage of their overall time to these priorities. Of course, if you measure and manage something, it becomes a priority regardless of its importance. At one industrial company, a frontline supervisor spent almost all his time firefighting and doing unproductive administrative work, though his real value was managing, coaching, and developing people on the shop floor. The reason for the misallocation was that shop-floor time was neither structured nor measuredno one minded if he didnt show up but he got into trouble by not attending meetings and producing reports. The same issue exists for senior executives: if their formal and informal incentives dont map closely to strategic priorities, their time will naturally be misallocated. The inclusion in performance reviews of explicit, time-related metrics or targets, such as time spent with frontline employees (for a plant manager) or networking (for senior partners at a professionalservices firm), is a powerful means of changing behavior. So is

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friendly competition among team members and verbal recognition of people who spend their time wisely. And consider borrowing a page from lean manufacturing, which emphasizes standard work as a way to reduce variability. Weve seen companies define, measure, and reward leader-standard work, including easy-tooverlook priorities from walking the halls to spending time with critical stakeholders.

4. Refine the master calendar

To create time and space for critical priorities, business leaders must first of all be clear about what they and their teams will stop doing. Organizationally, that might mean reviewing calendars and meeting schedules to make an honest assessment of which meetings support strategic goals, as opposed to update meetings slotted into the agenda out of habit or in deference to corporate tradition. While many large companies create a master calendar for key meetings involving members of the senior team, few take the next step and use that calendar as a tool to root out corporate time wasting. There are exceptions, though: one global manufacturer, for example, avoids the duplication of travel time by always arranging key visits with foreign customers to coincide with quarterly business meetings held overseas. In our experience, companies can make even more progress by identifying which meetings are for information only (reporting), for cross-unit collaboration (problem solving and coordination at the interfaces), for managing performance (course-correcting actions must be adopted at such meetings, or they are really just for reporting), or for making decisions (meetings where everything is

While many large companies create a master calendar for key meetings involving members of the senior team, few use that calendar as a tool to root out corporate time wasting.

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approved 99 percent of the time dont count, since they too are really for reporting). Executives at the highest-performing organizations weve seen typically spend at least 50 percent of their time in decision meetings and less than 10 percent in reporting or information meetings. But most companies allocate their leadership time in exactly the reverse order, often without knowing it: the way people spend their time can be taken for granted, like furniture that nobody notices anymore.

5. Provide high-quality administrative support

One of the biggest differences we saw in the survey involved the quality of support. Of those who deemed themselves effective time managers, 85 percent reported that they received strong support in scheduling and allocating time. Only 7 percent of ineffective time allocators said the same. The most effective support weve seen is provided by a global chemical company, where the CEOs administrative assistant takes it upon herself to ensure that the organizations strategic objectives are reflected in the way she allocates the time of the CEO and the top team to specific issues and stakeholders. She regularly checks to ensure that calendared time matches the stated priorities. If it doesnt, during priority-setting meetings (every two weeks) shell highlight gaps by asking questions such as, We havent been to Latin America yet this yearis that an issue? Do you need to schedule a visit before the end of the year? Or, Are these the right things to focus on? Since youre already going to Eastern Europe, what else should we schedule while youre out there? Do we need to clear the decks to make more time for strategic priorities? In addition, the CEOs administrative assistant owns the master calendar for corporate officers and uses it to ensure that the executive team meets on important topics, avoids redundant meetings, and capitalizes on occasions when key leaders are in the same place. Finally, to give senior leaders time to reflect on the big picture, she creates quiet zones of minimal activity two or three days ahead of significant events, such as quarterly earnings reports, strategy reviews with business units, and board meetings. Such approaches, which make the executives allocation of time dramatically more effective, underscore the importance of not being penny-wise and pound-foolish in providing administrative support.

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The time pressures on senior leaders are intensifying, and the vast majority of them are frustrated by the difficulty of responding effectively. While executives cannot easily combat the external forces at work, they can treat time as a precious and increasingly scarce resource and tackle the institutional barriers to managing it well. The starting point is to get clear on organizational priorities and to approach the challenge of aligning them with the way executives spend their time as a systemic organizational problem, not merely a personal one.
The authors wish to thank Caroline Webban alumnus of McKinseys London office and a senior adviser to McKinsey on leadership, as well as chief executive of SevenShift Leadershipfor her contribution to the development of this article. Frankki Bevins is a consultant in McKinseys Washington, DC, office, and Aaron De Smet is a principal in the Houston office.

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Four flavors of frustration

If youre a senior leader pulled in too many directions, worried there arent enough hours in the working day, and frustrated youre just not getting the right things done, youre in excellent company. A recent McKinsey survey found that only 9 percent of global executives were fully satisfied with the way they spent their time, and roughly one-third were actively dissatisfied. A segmentation analysis of the unhappy leaders revealed four distinct groups of similar size:

Online junkie

Schmoozer

Online junkies stick to the office and spend less time than others managing and motivating their employees. Roles: Wide ranging Communication channel: E-mail, phone Pain points: Personal contact 38% of time spent using asynchronous messaging

Schmoozers spend much of their time on the outside and can be elusive for their direct reports. Roles: CEOs, sales directors Communication channel: Face to face, meetings with clients Pain points: Strategy, thinking time 29% of time spent on the phone

Cheerleader

Firefighter

Cheerleaders are good with employees, but spend little time with outsiders (including customers). Roles: C-suite executives Communication channel: Face to face, internal meetings Pain points: External orientation 55% of time spent face to face

Firefighters are invariably dealing with emergencies, micromanaging and operationally focused.
Illustrations by Bill Butcher

Roles: General managers Communication channel: E-mail Pain points: Direction setting, meeting people 39% of time spent alone

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